Indian stock markets have been largely declining since the last seven trading sessions with BSE Sensex losing about 1,212 points over the uncertain outcome of Karnataka elections and fiscal deficit disquietness on ballooning of crude oil prices. In the last one-and-half-month period, stocks have been highly steered by the outcome of their Q4 results and future guidance given by the respective companies.
Amid the fourth-quarter earnings for the financial year 2017-2018, markets have seen extreme cases such as the biggest-ever quarterly loss by an Indian bank (PNB Q4 Results), first-ever quarterly loss by India’s third-largest private bank (Axis Bank Q4 Results) and cheering moments such as India’s largest IT company touching $100 billion in market capitalisation (TCS with $100 billion m-cap).
In the earnings-packed environment, we take a look at a small-cap metal stock priced below Rs 55. The company has recently reported better-than-expected Q4 results driving on the back of higher revenue. According to a brokerage firm, the stock can gain up to 50%.
Shares of Pennar Industries have risen about 18% in the last one year to Rs 53.8 from a share price level of Rs 45.65 on NSE. The research and brokerage firm Philip Capital has maintained a ‘buy’ on the stock of Pennar Industries with a target price of Rs 80 per equity share which implies an upside of 49% from the CMP (Current Market Price). “At CMP, Pennar trades at 6.7x our FY20 earnings and 3.6x EV/EBITDA. Pennar’s revenue profile has changed significantly towards value‐added
products and it is in a strong position to capitalise on any economic recovery. Sale of power asset has improved the balance sheet and return ratios. We maintain earnings and valuation at 10x FY20 with a target of Rs 80 (Maintain),” Philip Capital said in a report.
Shares of Pennar Industries are categorised in the ‘B’ group of BSE and are a component of S&P BSE Smallcap and Nifty Metal indices, respectively. As per the share price of Rs 53.5, Pennar Industries commands a market capitalisation of Rs 653 crore (approx).
Disclaimer: Views and recommendations given in this section are the brokerage firms’ own and do not represent those of www.financialexpress.com. Please consult your financial adviser before taking any position in the stock/s mentioned.